- 11:33 ET, Apr 19 2022
- Updated: 11:33 ET, Apr 19 2022
MILLIONS of Americans are just days away from receiving their second $841 check for the month.
The average SSI claimant is getting $621 a month in benefits this year, thanks to the cost-of-living adjustment climbing to 5.9 percent, but the maximum payment per individual is $841 per month.
This time around, SSI claimants can expect to get two of the same checks worth up to $1,682.
The first checks should have arrived on April 1, and the second for the month are due on April 29.
The payment schedule will be impacted because the first of May (the date SSI benefits are normally sent out) is a Sunday.
Read our Supplemental Security Income live blog for the latest news and updates…
How do Social Security claimants pay taxes?
If it turns out that you do owe taxes on your benefits, you can opt to make quarterly estimated payments to the IRS, or you can choose to have federal taxes withheld when you initially apply for benefits.
You can choose 7 percent, 10 percent, 12 percent, or 22 percent of your monthly benefit withheld for taxes.
Do Social Security claimants need to pay taxes?
In January of each year, you’ll be notified of how much you received in benefits during the previous year.
This Social Security benefits statement is a form SSA-1099 and can be used to help you complete your tax return.
By using this form, you’ll find out if your monthly benefits are subject to tax.
If by February you’ve not received this form, or if you’ve misplaced it, you can request a new one using your online Social Security account.
SSI benefits for children with disabilities
According to the Clinton Journal, to be deemed medically qualified for SSI, a child must fulfill all of the following disability requirements:
- In 2022, if the kid is not blind, he or she must not be working or earning more than $1,350 per month. In 2022, if the child is blind, they must not work or earn more than $2,260.
- The child must have a medical condition or conditions that cause significant functional difficulties. This indicates that the condition(s) must severely limit the activities of the youngster.
- The condition(s) of the kid must last at least a year or be predicted to cause death.
Some states offer more SSI payments
Some states contribute to the total amount payable to SSI recipients.
That means depending on the state you live in, you may receive a supplemental payment in addition to SSI from the federal government.
The SSI Benefits website shows which states pay a supplement to people who receive SSI.
SSI claimants won’t receive benefits in May
SSI payments usually go out on the first day of a month.
However, if the first day in a month is a weekend, payments will go out on the preceding Friday.
May 1 is a Sunday, so May’s SSI benefits will go out on Friday, April 29 instead.
Therefore, recipients will collect two payments in April.
How to maximize benefits, part three
You can start claiming at age 62, but this would result in a permanent 30 percent reduction of your benefits.
If your full retirement age is 66, you’ll get 100 percent of your monthly benefit if you start claiming then.
Or if you delay benefits for an additional 12 months, you’ll receive 108 percent while you’ll get 132 percent of the monthly benefit if you wait until 70.
You can’t earn delayed retirement credits beyond age 70, so there’s no point to delay your claim further than this.
You can also use the Maximize My Social Security tool by professor and economist Laurence J. Kotlikoff to help you boost your benefit amount as well.
How to maximize benefits, continued
The maximum wage taxable is $147,000 in 2022, but it changes each year as salaries increase.
Once your earnings exceed that wage cap, you don’t get taxed on it for Social Security.
The third but perhaps the easiest way to boost your benefits is to delay your claim.
How to maximize benefits
To get the maximum benefit, you need to take three main steps.
Firstly, you’ll want to make sure that you’ve worked for at least 35 years.
If not, zeros will be averaged into your calculation for each year you’re missing income under the 35-year threshold.
You must also earn the maximum wage taxable or more for at least 35 years.
FRAs by year
For individuals retiring at 62, the FRA has steadily increased from 65 to 67 since 2000, but 2022 is the last year.
Claimants born later will have to wait longer to get their full benefits as a result of the changes.
However, the earliest a person may begin collecting Social Security retirement payments is still 62 years old.
Depending on your birth year, The Sun has rounded up FRAs:
- Birth year: 1943-1954. FRA: 66
- Birth year: 1955. FRA: 66 and two months
- Birth year: 1956. FRA: 66 and four months
- Birth year: 1957. FRA: 66 and six months
- Birth year: 1958. FRA: 66 and eight months
- Birth year: 1959. FRA: 66 and 10 months
- Birth year: 1960 and later. FRA: 67
When can you start receiving SS benefits?
While you can begin collecting Social Security payments at the age of 62, you will only be eligible for full benefits after you reach full retirement age (FRA).
Your full retirement age (FRA) is the age at which you are eligible for full Social Security payments.
The year and month in which you achieve your FRA are determined by the year in which you were born.
Most people’s FRA is presently 66 and a certain number of months or 67.
If you wait until your FRA, not only will you receive your entire retirement benefit, but if you wait past your FRA, your payout will rise every year until you reach the age of 70.
Age to claim Social Security benefits, continued
This move might “cascade to other official ages throughout the tax code and the government’s programs, Social Security included,” according to Mark J Warshawsky, a senior fellow at the American Enterprise Institute.
While no changes to Social Security are now planned, there are a few reasons why they may.
- The RMD age may increase
- The Social Security Administration will run out of funds by 2034
Age to claim Social Security benefits
A bill that would raise the required minimum distribution (RMD) age just passed the House of Representatives.
The RMD age is the age at which people must withdraw money from their retirement accounts or suffer penalties from the IRS.
Changes to the RMD age, according to CNBC, might have an impact on Social Security.
How Social Security is funded, continued
The Social Security Administration (SSA) uses your taxes to pay people who are getting benefits right now.
Any unused money goes to the Social Security trust fund, which pays monthly benefits to you and your family when you start receiving retirement benefits.
How Social Security is funded
Social Security helps retired workers but it also pays benefits to widows, widowers, and children – benefiting more than 64million people in total.
When you work, you pay into Social Security. The money you pay in taxes isn’t held in a personal account for you to use when you get benefits.
Calls for more money, continued
Retired workers will now see, on average, their monthly check increase from $1,565 to $1,657 a month.
Meanwhile, a typical couple’s benefits will increase by $154 – from $2,599 to $2,753 per month.
Some are wondering if there will be a $200 increase to the payment, according to Marca. There are no plans in place, yet, to make this a reality.
If this were to happen, a recipient’s benefit last year would’ve needed to be $3,389. This exceeded the maximum benefit of $3,895.
Social security recipients calling for $200 extra
Some social security recipients are calling for an extra $200 amid fears that the COLA increase will not cover price rises.
Payments this year are 5.9 percent higher than in 2021 following the largest cost-of-living adjustment in nearly 40 years.
The increase came into effect on January 1 as inflation continues to reach record highs across the country amid the supply chain crisis.
Debts SSI can be used to pay off
While SSI is generally protected by law, there are certain exceptions.
Legal experts say that Social Security cannot be used to pay off debts such as credit cards, medical expenses, or personal loans.
Social Security, on the other hand, can be used to pay off other sorts of debt, such as:
- Taxes on the federal level
- Student loans from the federal government
- Aid to children
- Other federal obligations
When you owe federal taxes, you can have up to 15 percent of your Social Security taken away.
Student loans and other non-tax obligations are in the same boat.
Can SSI be used to pay child support?
The rules for child support vary by state.
If you support another child, the maximum amount that can be garnished is 50 percent of your Social Security benefit.
If you don’t support another child, 60 percent of your benefit can be taken.
And 65 percent can be taken if the support is more than 12 weeks past due.
SSI and SSDI: What’s the difference?
Disability benefits are provided by the Social Security Administration (SSA) through two independent programs: Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).
While both SSI and SSDI employ the same concept of “individuals with disabilities” to determine eligibility for payments, there are some significant distinctions between the two programs.
Inflation: What is causing it?
There are various reasons why inflation is occurring. The first reason is that since Russia’s invasion of Ukraine, oil prices have risen dramatically.
As a result, petrol and other transportation expenses have increased.
Furthermore, in order to stimulate the economy, the Federal Reserve has kept interest rates low.
As a result, more individuals are borrowing and spending money, contributing to inflation.
Finally, salaries have been increasing in recent years, putting upward pressure on pricing.
Inflation: What is the current rate, part three
Annual consumer price increases hit another 40-year high of 8.5 percent in March, USA Today reported.
Thankfully, some economists say the yearly rises should slowly decline through 2022.
Inflation: What is the current rate, continued
According to some experts, whereas February was formerly predicted to be the high for US inflation, readings were expected to rise beyond 8 percent, according to Bloomberg.
Because of the Ukraine conflict and Biden’s restriction on Russian energy imports, oil supplies have been constricted, causing retail gasoline and other commodity prices in the US to hit new highs this month.
Inflation: What is the current rate?
Consumer price increases in the US raced to a new 40-year high in February, mainly to rising fuel, food, and housing expenses, with inflation expected to grow much more following Russia’s invasion of Ukraine.
The consumer price index increased 7.9 percent from a year ago, following a 7.5 percent increase in January, according to Labor Department statistics.
Inflation jumped 0.8 percent in February compared to the previous month, owing to increasing gasoline, food, and shelter expenses, Bloomberg reported.
What is ‘shrinkflation?’
In periods of high inflation, “strinkflation” is a common practice where companies reduce items’ size, amount, or quantity while keeping the same prices.
Companies do this to increase profits without having to noticeably adjust prices.
“Downsizing comes in waves, and it tends to happen during times of increased inflation,” consumer rights lawyer Edgar Dworsky told Quartz.
“Bottom lines are being pinched and there’s three basic options: raise the price directly, take a little bit out of the product, or reformulate the product with cheaper ingredients.”
Inflation: What is it?
Inflation is defined as the rate at which prices rise over time.
It’s usually a broad metric, such as the general increase in prices or the growth in a country’s cost of living.